In major Canadian cities like Toronto and Vancouver, it’s common knowledge that millennials are being priced out of starter homes. Many feel destined to be perennial renters. But that’s not necessarily the case in places like Wellington, Ont., or Gibsons, B.C., where affordable recreational properties only a couple of hours from the big city are drawing young buyers.
It’s a trend that Christopher Alexander, executive vice president of RE/MAX of Ontario-Atlantic Canada, calls “the beginnings of a long-anticipated generational shift of buying power from baby boomers to millennials.”
According to the 2019 Recreational Property Trends survey conducted by Leger for RE/MAX Canada, 56 per cent of millennials are in the market to purchase a recreational property. This marks a 14 per cent increase from last year, when most recreational markets surveyed reported that baby boomers were their main customers.
This new demand has also resulted in greater opportunities for sellers: 74 per cent of regions across Canada are experiencing year-over-year price increases in recreational properties.
The 18 to 34 generation has different motivations for buying recreational properties than their predecessors. Half of those surveyed envision these properties as places to participate in outdoor pursuits like hiking and fishing, versus only 38 per cent of boomers who value those opportunities.
“Recreational living is very much aligned with this generation’s quest for work-life balance,” Elton Ash, regional executive vice president, RE/MAX of Western Canada, says of millennials. He also points out that growing numbers of young buyers are even choosing to make recreational properties their primary residences.
The survey also indicates that some areas of the country may be more desirable for millennials than others, and sellers are matching their prices accordingly.
Properties in British Columbia (notably, Tofino and Shuswap) experienced the highest median price growth, followed closely by Ontario (and regions like Collingwood and Blue Mountain). To contrast, prices for recreational properties in the Prairies have dipped, possibly due to lower purchasing power among millennials who have struggled to overcome challenging economic factors.
“There is little doubt that economic factors in the Prairies have affected demand in the recreational market,” says Ash. “At the same time, B.C.’s economy is still going strong and has experienced an increased interest in its recreational market in recent times.”
Just a year ago, real estate prospects for millennials seemed bleak. An Abacus Data poll found that one in four millennials think their generation is worse off than their parents’ generation; 17 per cent say they’d probably never be able to own a home of their own. A personal finance survey of prospective millennial investors across Canada revealed a generation frustrated at being shut out of urban real estate markets or stressed by the high cost of the homes they already owned.
Today, Alexander says the millennial quest for livable and affordable communities “will bring a different set of lifestyle and property criteria” to the recreational property market. Knowing what millennials are looking for can help sellers access a brand-new demographic of buyers for their cabins and cottages, too.
“Factors like Internet connectivity, access to recreational activities and proximity to towns with urban conveniences are becoming more important selling features,” Alexander says. Highlighting those elements can make a millennial-friendly listing attractive to a wide range of buyers.
A recent post by RE/MAX highlights the importance of green, energy-efficient homes to millennials. As a generation that cares about the climate crisis and is conscious of their ecological footprint, many millennials take green housing and energy efficiency into consideration when searching for and purchasing their first home.
According to the Leger survey, all Canadians value some similar things in a home away from home. They see recreational properties as a place to relax and spend time with loved ones (64 per cent of buyers), with affordability and reasonable maintenance costs being the most important factors they consider. However, location is also key, with waterfront access (45 per cent) and proximity to town (44 per cent) ranking highly.
More importantly, most buyers expect reasonable travel times from their primary home: more than half would like to travel to their recreational property in about two hours or less, while only 22 per cent would travel three hours or more. These numbers reflect the fact that the Friday and Sunday rush to travel between home and a distant cabin or cottage can dull the property’s luster.
There are, however, some revealing regional differences in what Canadians value in a recreational property. Compared to Western Canadians or Ontarians, more Atlantic Canadians are looking for seclusion; Ontarians, meanwhile, are the most likely to value a property’s proximity to town.
It’s foretelling of a coming trend that 33 per cent of millennials see out-of-town properties as a solid financial move — the highest of any generational group surveyed. The Leger and RE/MAX survey results are early signs that the motivations of millennials are shifting, moving from the seemingly impossible quest to find a balanced life in Canada’s cities to seeking increasingly accessible and affordable living in recreational areas.